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Franklin Templeton has received approval from the Luxembourg regulatory authority (CSSF) to launch the first fully tokenized UCITS fund on a public blockchain.
It will be the first fund of this type for an asset manager based in Europe.
Summary
Franklin Templeton pushes the fintech world on blockchain
Franklin Templeton is a company from the United States, founded in New York in 1947, but also active in Europe. It is now headquartered in California and has more than 1.6 trillion dollars in assets under management.
In particular, its subsidiary Franklin Resources, listed on the New York Stock Exchange with the ticker BEN, is involved in investment management in over 150 countries.
The mission of Franklin Templeton is to help its clients achieve better outcomes through investment management expertise, wealth management, and technological solutions. In fact, it offers specialization on a global scale, with fixed income, equity, alternative, and multi-asset solutions.
It has more than 1,500 investment professionals and offices in the main financial markets around the world.
Furthermore, its subsidiary Franklin Templeton Digital Assets Services (FTDAS) has been active in the digital asset ecosystem since 2018, and is involved in creating technology solutions based on blockchain, and developing investment strategies in this sector.
The first Franklin Templeton fund tokenized on blockchain
The on-chain fund will be supported by a solid ecosystem of digital assets, and aims to unlock new advantages and use cases for clients as the technological adoption of these new technologies increases.
FT Digital Assets will be the first asset manager in Europe to launch a tokenized fund on a public blockchain using internal capabilities and proprietary technologies.
The launch of the fund is expected in the coming months, and its shares will be issued using Franklin’s proprietary platform enabled for blockchain transfer agency.
This initiative underscores Franklin Templeton’s belief that Web3 and digital technologies have the potential to reshape the asset management industry.
The Luxembourg regulatory authority, Commission de Surveillance du Secteur Financier (CSSF), has given its approval for the launch on the market of this fully tokenized UCITS fund.
In April three years ago, Franklin Templeton had already launched the first mutual fund registered in the United States that used a public blockchain to process transactions and record share ownership, the Franklin OnChain U.S. Government Money Fund2.
Tokenization: all the advantages
The advantage of using tokens on blockchain is that the latter, if decentralized, is a digital ledger that records and verifies transactions in a secure, transparent, immutable, and publicly verifiable way by anyone.
Furthermore, it allows peer-to-peer transactions without the need for intermediaries, ensuring that all data is permanently recorded and visible to everyone. Traditional centralized solutions, on the other hand, are more vulnerable to security breaches and involve greater administrative burdens for those who have to manage them.
The advantages of asset tokenization are primarily the ability to access greater liquidity, as it increases the accessibility of financial products to a wider audience, in addition to composability and, of course, transparency.
The comments
The head of digital asset advisory services at Franklin Templeton, Sandy Kaul, stated:
“We want to be recognized as leaders in developing innovative solutions in line with the needs of our clients in terms of business growth, operational efficiency, and scalable best practices. Disruptive technology and innovation in financial services are reshaping the sector and changing the fundamental rules on how to attract, protect, and serve clients. We believe that in the future there may be opportunities to create other tokenized financial products, including interoperability with other digital assets and native blockchain structures. We are committed to continuing to explore these opportunities as part of our broader strategy for digital resources”.
The Head of Franklin Templeton Digital Assets, Roger Bayston, added:
“We have been active participants and builders in the digital asset ecosystem since 2018 and have witnessed firsthand the transformative power of blockchain technology. As technological innovation proceeds at a steady pace, we continue to work closely with regulators around the world to introduce innovative solutions to the market. Leveraging our in-depth knowledge of blockchain ecosystems and proprietary technologies, we are well-positioned to introduce products that serve to increase understanding and accessibility of digital resources within the broader community”.
The Head of Americas, Europe & UK of Franklin Templeton, Matt Harrison, concluded by saying:
“This new fund will mark a fundamental step in our global commitment to leverage blockchain technology for clients outside the United States. We constantly focus on innovation and creating long-term value for our clients, and we want to equip them with tools, services, and knowledge to make informed decisions. With our proprietary solutions, we offer greater security, transparency, and efficiency, further consolidating our leadership in the rapidly evolving space of digital assets”.